The troubles of fast fashion giant Shein continue to get stuck after a new hurdle in London's highly anticipated initial public offering (IPO).

Reuters reported on Wednesday that the e-commerce behemoth is currently aiming to get a Hong Kong listing after it has not received approval from Chinese regulators for its hype London IPO.

The London listing is seen as a boon for the 16-year-old Chinese basic company, providing international legitimacy and gaining an in-depth and mature pool of Western investors. However, analysts say they are not surprised given the company's ongoing scrutiny around the company.

“We have been saying that we think Hong Kong will be Shein’s safer IPO option,” Samuel Kerr, head of global equity capital markets at Mergermarket, told CNBC’s “Squawk Box Europe” on Thursday.

"For international investors, it will always be an IPO with a lot of hair on it, maybe it will be better for domestic audiences," he added.

Neither Shein nor the China Securities Regulatory Commission (CSRC), a Chinese regulator, responded to CNBC's request for comment on the plan. Hong Kong Exchange and Clearing Limited said it does not comment on various companies.

Shein faces an uphill battle in its listing ambitions as it tries to avoid allegations of using forced labor to produce its $5 T-shirt and $7 shoes. Although it strongly denied that claim, Shein shifted its focus from New York listing to London last year, after U.S. lawmakers faced such problems below.

Meanwhile, the focus on its business practices prompted an investigation by the EU, which earlier this week found the company violated consumer protection laws, including the use of fake discounts, pressure to sell and misleading shoppers about sustainability claims.

The month’s vulnerability has only added to the company’s plight in the case of similar measures that may be taken by low-cost goods in the U.S. (EU and UK).

"The attacks of criticism appear to strengthen criticism that led to London listings, which is believed to be part of the reason Chinese regulators are reluctant to give the green light to the IPO," wrote Susannah Streeter, head of currency and markets at Hargreaves Lansdown in a note on Wednesday.

Shein's proposed London listing is also seen as providing a much-needed boost to the UK's boring IPO market after a series of stand-outs and defections amid fierce competition in other financial markets.

"It will be a blow to London's ambitious ambitions of big names listed in the capital, but it's not surprising given the piles of obstacles (the company seems to be moving in the other direction," Streeter said.

Still, some are concerned that positioning the controversial listing as a face of London’s IPO revival could send a false signal to investors.

Kerr said: "Some people in London are somewhat concerned that Shein will be viewed as a benchmark barometer for the future of the London Stock Exchange and the IPO back to London. I think that will be problematic."

Other scrutiny in the UK is also seen as a pile-up pressure on Shein valuation, e.g. ASOS,,,,, Next and boohoo. The company is reportedly under pressure to cut its London listing valuation to $30 billion, which is lower than the previously estimated $50 billion, according to Bloomberg.

"Far away from the UK and away from the UK peers may give it a higher valuation," Kerr noted.

Meanwhile, the listing of Shein may provide further boons for Hong Kong following new capital flows from onshore and offshore investors.

"Given the maturity, depth and valuation potential of these markets, the milestones listed by Shein in London or New York will be a meaningful milestone," Rui MA, founder and analyst at Tech Buzz China, told CNBC via email.

She added: "That is, the market is ultimately shaped by their listing and the quality of the participants. Sean's listing is a victory for Hong Kong, but it has not turned around yet."

Shein Investors CNBC declined to comment on the relocation of the list report.